Facebook Q3 revenue jumps 60pc

The world's largest social network said it earned net income of $US425 million, or 17 cents a share, in the three months ended September 30. Photo: Bloomberg

Facebook posted strong growth in its mobile advertising business on Wednesday but rattled investors after saying that it did not plan to boost the frequency of ads shown to users.

Shares of the world’s No. 1 online social network soared as much as 15 per cent in extended trading before suddenly falling to $US47.40, down 3 per cent from its $US49.10 closing price

Revenue from mobile ads, which appear on smartphones, represented 49 per cent of Facebook’s total advertising revenue in the third quarter, or about $US880 million ($924 million). Mobile ads generated about $US150 million in the year-ago period, when Facebook was just beginning to develop its mobile ad business.

He said Facebook’s strong mobile advertising revenue in particular has put to rest the worries that many investors had at the time of the company’s 2012 IPO.

“They clearly have the product, they have the traffic and now they have the advertising solution,” said Mr Josey.

Facebook said the number of its monthly active users increased to 1.19 billion as of the end of September, up from 1.15 billion at the end of June. Facebook said it counts about 507 million daily active mobile users.

Facebook topped Wall Street’s revenue targets on Wednesday, as robust growth in its mobile advertising business drove a 60 per cent increase in revenue.

Total revenue in the third quarter was $US2.016 billion, ahead of the average analyst expectation of $US1.911 billion, according to Thomson Reuters.

Facebook said it earned net income of $US425 million, or 17¢ a share, in the three months ended September 30, compared with a net loss of $US59 million, or 2¢ a share in the year-ago period.